Thursday, February 27, 2020

The Best Ways to Save Money

jar of change McHenry, Illinois

Are you looking at your bank accounts and wondering, “how can I save money?” Managing your money doesn’t have to be tricky or stressful. The professionals at McHenry Savings Bank (MSB) are here to help you. Try some of these tips to help get control of your financial life, and start saving today. 

Create a budget
Managing your finances doesn’t have to be stressful. Creating a budget is a great way to take control of the finances in your life. Consider sitting down every month and analyzing  how you are spending your money.. MSB’s online eBanking allows for you to categorized each expense occurring on your account (checking, ACH or debit) so you can create meaningful categories and types of expenses customized to your needs.  You can then create reports which show you how funds were utilized. This might be a helpful tool in creating your budget and understanding your spending habits. One recommendation is to try the 50/30/20 budget. In this budget, you spend 50% of your after taxed income on all your necessities; no more than 30% on your wants and 20% goes into your savings or towards debt repayment. If those percentages do not work for you, create your own – but stick to it!

Another suggested budgeting tip is using envelopes marked for specific expenses. This method allows you to visualize and maintain a flexible budget. By using this budgeting technique you are able to prioritize certain categories of different household expenses and put the correct amount of money towards each. It also allows you to save money for that vacation you have been dying to take or that brand new toy you just have to have. 

Have an emergency fund
Life has a way of throwing surprises your way when you least expect them. Make sure you have money saved up in an emergency fund, for those unexpected times. You might be asking yourself, how much am I supposed to set aside for an emergency fund? To start, you’ll want to make sure that you save more than just for a rainy day. It is recommended that you have 3-6 months of monthly expenses saved up in case of injury or job loss. Having 3-6 months covered will prevent you from having to dip into your retirement funds, liquidating your investments, and/or having to open more lines of credit. 

man on phone banking app

Use online banking apps
Today, banking online is made easy for you using mobile apps. There are many benefits to using a mobile app. Some of these benefits include being able to transfer funds, pay bills, check your account balances, look at recent transactions, block ATM cards, etc. Seeing your accounts online puts you more in touch with your money and gives you greater control of how you spend. It is a great budgeting tool and can help you save your money. 

Paying off credit cards
Paying off your credit cards may seem like an impossible task for some people. Here’s a little trick to help you out. Line up your credit cards from the least amount owed up to the one with the most amount owed. Don’t worry about interest rates at this time. You will want to make minimum payments on all cards except the smallest card. Instead, you should go after that card and try to pay it off with everything you can. Then you can close the account and take the money you were using to pay off the smallest card and start using it towards the second smallest card. This process continues until you have all your cards paid off. 

Now that you know a couple of tips to help you save your money, it’s time to put it to action. Create that budget and emergency fund, pay off those credit cards, and download the mobile banking app. If you have any questions, the professionals at MSB are here to help with whatever you need. Give us a call at 815-385-3000 or visit our website. We also have many tools and calculators to help you budget your money. At MSB we work hard to earn your trust. 

Photo by: Michael Longmire